Exclusive: Trump Tariffs Jolt Textile Industry! Noida Exporters Seek Relief Amid Govt's 40-Nation Push

Textile exporters in Noida, one of the biggest textile hubs in India, are demanding government intervention and support for the small-scale businesses. The textile industry is facing challenges due to the US's 50% tariffs on items from India. The US tariffs came into effect on Wednesday, August 27.

To support textile businesses, the government has announced a 40-nation outreach strategy to diversify the export business and relaxed cotton import duties. However, textile traders believe that these measures will yield results only in the long run, while what they urgently need is immediate relief, especially small-scale businesses on the brink of closure due to US tariffs.

Why Noida Is Among The Worst-Hit Textile Hubs Due To Trump Tariffs?

Noida is home to 4,500 textile factory units and generates a textile export business worth around Rs 55,00 crore, employing over 10 lakh workers in the industry. With no signs of reduction in US tariffs, the textile industry in Indian cities like Noida, Tirupur and Surat is bearing the brunt of rising competitiveness, according to Federation of Indian Export Organisation President, S C Ralhan.

Due to rising competitiveness and the doubling of US tariffs, businesses are left with no choice but to negotiate with American buyers and sell their items at a heavily discounted price.

"When the 25% taxes were announced by the US earlier, we had given a 12.5% discount on our products, and the shipments were released. As the tariff has been doubled to 50%, they have put orders on hold. Around 20% of these orders have been reassigned to other exporters from Bangladesh, China, Cambodia, Shri Lanka, etc. They are negotiating for a more discount on the remaining high-value items," Lalit Thukral, President of Noida Apparel Export Cluster, told GoodReturns.

Big Exporters May Survive, MSMEs Face Existential Threat

Given the current US tariff situation, textile exporters are ready to sell items at more than 12.5% discounted rates. But not every industry player is capable of offering these discounts, and doing so would lead to massive losses, highlighted Thukral.

"While large-scale textile exporters may survive by providing additional discounts, it is impossible for small-scale businesses to survive in the current scenario. Lakhs of workers are at risk of losing their jobs, and thousands of small-scale textile exporters are at risk of closure," he added.

Fear of Job Loss For Workers

In the absence of a comprehensive relief package by the Government, many small-scale textile exporters in Noida are facing the risk of shutdown of production for more than three to four months.

"Things are complicated right now. We are uncertain about the production for future contracts due to tariff uncertainty. We are proceeding very cautiously. As of now, there have been no layoffs, but many workers are at risk of losing their jobs if the situation doesn't improve in the coming days," a Noida-based textile exporter told GoodReturns.

What Measures has the Government Taken So Far?

The Government has proposed a 40-country outreach strategy for exporters to approach apparel buyers in 40-key markets including Italy, Germany, France, UK, Japan, South Korea, Germany, France, Italy, etc.

Additionally, the Centre has announced to extend the duty-free import of cotton by three months till December 31.

Are These Measures Sufficient To Save the Textile Industry?

Many experts highlight that the recently announced government initiatives will bring some relief to exporters, but industry players hope for more from the government. While there are initiatives to diversify the Indian textile export markets to other countries, Thukral doesn't see that coming into effect in the near term.

"It is not practically possible for textile exporters to switch and build a market in another country for exports in few months. It took us fifty years to strengthen our textile market in the US by adapting to their requirements, measurements, fabric quality and designs. It is not viable to instantly start working with another country," he explained.

"Financial support in the form of schemes like Rebate of State Levies (ROSL), labour subsidy, immediate GST release, short-term relief package, etc, would help in supporting small players in the industry," added Thukral, who is also hopeful that the government may take some of these measures sooner than later.

As Finance Minister Nirmala Sitharaman, on Thursday, assured the textile industry players of full government support, stakeholders are hoping that the government may announce additional relief measures in the coming days.